Google, Airtel Push UPI-Based Digital Payments Market

The digital payments sector in India is growing at a rapid pace, especially, the Unified Payments Interface or UPI-based digital payments market, a payments protocol built by government-backed organization NPCI. The newly launched Google Tez is the latest UPI-based payments app in the country, propelling the Internet search giant to grab a share of India’s digital payments pie. Google Tez is a standalone payments app, available on Android and iOS, and is powered by UPI and can be used to pay for movie tickets, utility bills, and make other transactions online, the company said at the recent launch.

“The app weighs just 7MB on Android and works with the vast majority of Android smartphones in the country,” Caesar Sengupta, the head of Google’s Next Billion programme said onstage at the event. The app even works on Android KitKat-powered smartphones, Sengupta said. iPhone users — going as back as iPhone 4s - will be able to use Tez app as well, he added.

The Google Tez UPI-enabled digital payments app supports various local languages including Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu. ”The new app comes with a Cash mode” option, which transmits “audio” using Google’s QR technology to identify the person nearby you, and lets you pay or receive money when you’re able to find that user. “It works on almost all phones sold in India,” he said.

Meanwhile, Bharti Airtel on Sunday integrated UPI feature on its payments platform. Airtel Payments Bank has now become the first payments bank in India to integrate the UPI on its digital platform. With the UPI integration, Airtel is aiming at making secure digital payments and instant money transfers easy for its customers.

Commenting on the move, Shashi Arora, MD and CEO, Airtel Payments Bank said, “This would allow all our 20mn bank customers to create their personalized UPI handles on the Airtel app, and enable them to make digital payments in both the offline & the online space.”

Arora added that customers will be able to link their bank accounts on BHIM app and make UPI payments via the Airtel Payment Bank. Using Airtel Payments Bank, consumers will be able to make secure digital payments to both online and offline merchants. It will also allow customers to make instant money transfers to any bank account in India.

In the past few weeks, major Indian digital payment players like Paytm, FreeCharge, MobiKwik made headlines in their own way. And not to be left behind were emerging players like Amazon Pay, WhatsApp, Hike among others are also making efforts to tap the country’s digital payments market.

The Indian digital payments industry is projected to reach $500 Bn by 2020, contributing 15% to India’s GDP, as per a recent report by Google and Boston Consulting Group. As revealed by the report, by 2020, non-cash (includes cheques, demand drafts, net-banking, credit/debit cards, mobile wallets and UPI) contribution in the consumer payments segment will double to 40%. Already 81% of existing digital payment users prefer it to any other non-cash payment methods. Indian consumers are 90% as likely to use digital payments for both online as well as offline transactions.

“We are seeing a trend where the number of UPI based payment apps are increasing and this is likely to continue. This is currently in line with the expectations and requirements around digital payments and we will see new features to differentiate that will be added to differentiate the app and attract customer base,” said DD Mishra, Research Director, Gartner.

No wonder, all the digital payment players are gearing up to leverage this rising tide of digital consumers in the coming years. They are doing so by joining hands with traditional players such as banks and NBFCs to be able to garner a significant percentage of the 520 Mn smartphone users predicted in the country by 2020 in the Google and BCG report.

As for the latest release like Google Tez, Mishra said, “The shelf life for any new product is very less in today’s world. Google will need to keep adding new innovative services on top of it to continue to differentiate and build an ecosystem quickly to succeed.” He believes, It will face competition from UPI and wallet applications who are also working on similar initiatives.

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